On January 30, 2024 (Lunar New Year), are employees already off work? Is overtime pay on the Lunar New Year 2024 subject to personal income tax?
Do employees get a holiday on the 30th day of Tet Nguyen Dan 2024?
The 30th day of Tet is the transitional moment between the old and new years. It’s an extremely significant day that many people eagerly await. Many people often count down the time to Tet, waiting to go home, reunite with their families, and rest after a year of hard work.
According to the provisions of Article 112 of the 2019 Labor Code, employees are entitled to leave work and receive full pay during the Lunar New Year for 5 days.
Additionally, Section 5 of Announcement 5015/TB-LDTBXH of 2023 clearly outlines the Lunar New Year 2024 holiday plans for employees as follows:
- For the Lunar New Year holiday period: the employer can choose either 01 day at the end of the Year of the Cat and 04 days at the beginning of the Year of the Dragon, or 02 days at the end of the Year of the Cat and 03 days at the beginning of the Year of the Dragon, or 03 days at the end of the Year of the Cat and 02 days at the beginning of the Year of the Dragon.
- Notify the holiday plan for Lunar New Year 2024 to employees at least 30 days before implementation.
- If weekly rest days coincide with holidays, Tet, as stipulated in Clause 1, Article 112 of the 2019 Labor Code, then employees are entitled to compensatory rest days according to the next working day as stipulated in Clause 3, Article 111 of the 2019 Labor Code.
- Employers are encouraged to apply the Lunar New Year holiday period for employees as stipulated for officials and public employees.
CLEARLY, as outlined in the Lunar New Year 2024 holiday plans for employees, employees are entitled to leave work on the 30th day of Lunar New Year 2024 according to regulations.
Do employees get a holiday on the 30th day of Tet Nguyen Dan 2024?
How is salary calculated for employees working on Tet Nguyen Dan 2024?
According to the provisions of Article 98 of the 2019 Labor Code, regulations on overtime pay and night work pay are as follows:
Overtime Pay and Night Work Pay
1. Employees working overtime shall be paid based on the wage unit price or actual salary paid for the current job as follows:
a) On regular working days, at least 150%;
b) On weekly rest days, at least 200%;
c) On holidays, Tet, paid leave days, at least 300% excluding the holiday, Tet, paid leave pay for day-wage employees.
2. Employees working at night shall be paid an additional at least 30% of the wage unit price or the actual daily salary paid.
3. Employees working overtime at night shall, in addition to the pay prescribed in clauses 1 and 2 of this Article, be paid an additional 20% of the wage unit price or the actual daily salary paid for day work on regular working days, weekly rest days, or holidays, Tet.
4. The Government of Vietnam shall elaborate this Article.
If employees work during the Tet holiday, they are entitled to a salary of at least 300% excluding the Tet holiday salary for day-wage employees.
Additionally, if employees work at night, they will be paid an additional at least 30% of the daily salary and 20% of the Tet holiday salary.
Thus, working on Tet Nguyen Dan 2024, wages are calculated as follows:
- Working during the day: At least 400% of the salary.
- Working at night: At least 490% of the salary.
Is overtime pay during Tet Nguyen Dan 2024 subject to personal income tax?
According to the provisions in point i, clause 1, Article 3 of Circular 111/2013/TT-BTC, it is regulated as follows:
Tax-exempt incomes
...
i) Income from night work, overtime pay higher than the day work, working within the agreed hours as stipulated by the Labor Code. Specifically:
i.1) The higher part of the salary, wages for night work, overtime is exempt from tax based on the actual salary, wages paid for night work, overtime minus (-) the salary, wages calculated according to regular working hours.
Example 2: Mr. A's salary for regular working hours is 40,000 VND/hour.
- If an individual works overtime on regular days, he is paid 60,000 VND/hour; thus, the exempt income is:
60,000 VND/hour – 40,000 VND/hour = 20,000 VND/hour
- If an individual works overtime on rest days or holidays, he is paid 80,000 VND/hour; thus, the exempt income is:
80,000 VND/hour – 40,000 VND/hour = 40,000 VND/hour
...
Thus, according to the above regulations, the higher part of the salary, wages for night work, overtime is exempt from tax based on the actual salary, wages paid for night work, overtime minus (-) the salary, wages calculated according to regular working hours.
Hence, according to the above regulations, income received for working on holidays or Tet that is higher than regular days is exempt from personal income tax. The part of the income that is paid the same as regular days is subject to personal income tax.
Example: Mr. A's salary for regular working hours is 40,000 VND/hour.
- If an individual works overtime on regular days, he is paid 60,000 VND/hour; thus, the exempt income is:
60,000 VND/hour – 40,000 VND/hour = 20,000 VND/hour
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